... and we are in better shape than might have been the case, all things being considered. Don Cox noted BTL that the Rough gas storage facility has started up again** - a very curious, nay, fishy 'miracle', as we've noted before - albeit at 20% of its former capacity: but every little helps. Several UK coal plants have been revived, to be on standby in case the gas runs out and the wind doesn't blow. And the Germans have moved mountains to get floating LNG receiving import facilities online, again with the caveat that the volumes won't be as great as all that. They nearly made their ambitious gas storage inventory targets before going into winter, too. They, also, have been busily reviving coal, and indeed lignite plants for reserve duty. And they've done what I and others thought was probably not possible, in squeezing a few extra months out of the nukes that were set for closure. This wasn't possible with Hinkley Point B in this country, despite government pleading and financial blandishments: HPB was closing (and has indeed closed, as of August) due to age and infirmity, whereas the German nukes were closing by political fiat. That doesn't mean Scholtz will get any more months out of them next year, because the supporting infrastructure has been shutting down, too.
Several other EU nations, notably the Spanish, have been preparing very well, too.
On the supply-side downside, the French are again falling hugely short. Their nuke fleet was staggering back to its feet for winter in a partial way, after extensive safety-related closures, only to be hit by a wave of strikes. Well, there you go, Macron: it's a continuation of massive imports and the highest (wholesale) electricity prices in Europe for you, then.
This is also proving very costly for Germany, too - but I always said nobody should bet against their ability to put their shoulders to the wheel. You have to laugh when Macron throws a strop when it's announced by Germany that they are budgeting EUR 200 bn for their energy measures. Merde! That will distort the European energy market! Well what did he think: the richest nation in Europe would volunteer to freeze, out of fellow-feeling for the Frogs?
Talking of distorting the market, France is also desperately trying to get the EC to introduce a "cap on wholesale gas prices" - whatever that might conceivably mean in a truly global gas market. I won't bore everyone with my endless refrain that most European politicians don't understand how markets work. I used to finger the Germans most specifically for this, but it now looks as though most of the top players in Scholz's government have taken some rapid lessons on this topic since February, and know the score a little better. Tough titty, Macron - but you had it coming.
I only hope the new government here looks him squarely in the eye and tells him he can forget any hopes for Sizewell C he might have nurtured on behalf of the French équipe nucléaire; not on the terms he had in mind, anyhow. We've had enough of PMs bowing the knee to EDF in these matters.
Hold tight for the coming winter.
ND
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** Anon asked: anything to do with the cost of gas futures at the mo?
And the implications for Russia / Middle East LPG.
The forward market is in very strong contango at the moment (having been for months in backwardation, which some theorists say is impossible for a commodity like gas). This betokens market sentiment that for right now (i.e. until really cold weather strikes) Europe is looking OK for gas supply - a function of all those efforts noted above - and that winter 2023-24 now looks to be the big problem, despite some some idiot political pundits saying the coming winter will be the last we need to worry about. Fully-laden LNG tankers are stacked up off the Atlantic coasts of UK / France / Spain, effectively acting as floating storage. So yes, Anon, Rough (and UK plc) is in a position to benefit from this current situation. Rough, as you prob know, is 'seasonal' storage, i.e. designed only really for a single annual cycle of injection and withdrawal; and although there's plenty of volatility across the whole forward curve (which benefits such facilities) it pales into insignificance compared to the vol in the spot and short-dated markets, which benefits facilities with much shorter cycles (e.g. 1 or 2 months). I hope (but rather doubt) that HMG allowed Centrica to get on with their 'Rough miracle' without public money; because Centrica has played a pretty shifty game on this.
Whilst on the subject of storage economics: as you'd expect, owners of grid-scale batteries, limited though they are in capability, have been making a fortune for more than a year now: ditto owners of gas-fired peaking plants. Vol is the main play in town, now that simply going long isn't a one-way bet any more. For example, the current gas market contango will reverse in a matter of days if a Beast from the East hits (energy beast, that is - not Putin again).
Incidentally, the personal burnout in energy traders has to be seen to be believed. Initially they were just making fortunes; but now liquidity and credit issues are bearing down on them, and they can drop $10m on a cargo of LNG as easily as make it, in the touch of a button. Hairy times.